WASHINGTON—The Supreme Court on Tuesday dismissed a closely watched case involving union organizing, after concluding it had erred in agreeing to hear the case in the first place.

The court last month heard oral arguments to consider a tactic labor unions have used for decades: agreements in which an employer pledges to remain neutral with respect to a union's effort to organize its workers. The employer also may provide employee lists or other assistance. In exchange, a union may agree to refrain from picketing or criticizing the employer in public.

The central question for the high court was whether such agreements violate federal labor law.

Lower courts have reached conflicting decisions on such neutrality agreements between employers and unions. Last year, a federal appeals court in Atlanta held that such aid could be a "thing of value"—something federal law says employers can't provide and unions can't accept, to avoid corruption.

Three justices dissented from the Supreme Court's move to dismiss the case. Justice
Stephen Breyer,
writing for the dissenters, said leaving the issue unresolved "could negatively affect the collective-bargaining process." He indicated procedural complications were behind the dismissal, writing that it was possible the case had become moot because the specific labor contract at issue had expired. He also suggested that the plaintiff in the case, a Florida worker who opposed the formation of a union, might not have legal standing to bring a lawsuit.

Lawyer Richard McCracken, who represented the union in the Florida case, said he would have preferred a Supreme Court ruling on the merits, but predicted the move would have little impact because two U.S. appeals courts have issued rulings "completely rejecting the idea that these agreements violate the law."

The National Right to Work Legal Defense Foundation, a group that opposes what it calls "coercive union power" and backed the worker in the case, said the dismissal leaves the Atlanta court's ruling in place, "limiting the potential for backroom deals between union organizers and company officials."